The Most Profitable Molecule In Decades
Semaglutide is quickly shaping up to become the wonder drug of the decade. The molecule had initially been developed as a diabetes drug and was a success in this application.
However, users of semaglutide quickly started to report it also helped them lose weight, prompting the company Novo Nordisk to start clinical trials for the treatment of obesity. With the approval of semaglutide under the commercial name of Wegovy in January 2021, it became an instant blockbuster drug.
Novo Nordisk constantly struggled to produce enough to satisfy demand despite repeated increases in production capacity.
This, in turn, caused Novo Nordisk”s stock price to more than triple between January 2021 and January 2024. We discussed back then the story of Wegovy in detail in “The New Blockbuster Drug: Wegovy”.
However, this might just be the beginning of Novo Nordisk’s success story.
Source: Yahoo Finance
On March 8th, Wegovy received new approval from the FDA for reducing risks of cardiovascular death, stroke, and heart attack in adults with heart disease with obesity or overweight.
Considering how correlated heart diseases are with obesity or excess weight, this would represent a massive addressable market.
Obesity now affects more than 37% of US adults and 22%-30% of other developed countries.
Source: Polaris
And now, a new study seems to indicate that the effect on heart disease might not be directly linked to weight loss.
Women Benefiting More From Semaglutide
A new large clinical study of 52 weeks, 1,145 participants, involving researchers from Canada, USA, UK, and Denmark (Novo Nordisk researchers), titled “Efficacy of Semaglutide by Sex in Obesity-Related Heart Failure With Preserved Ejection Fraction: STEP-HFpEF Trials” has shown women are losing significantly more weight from using semaglutide than men.
This is good news, as females were exposed to more complications from obesity than men:
“Women living with obesity and heart failure with a preserved ejection fraction were also found to have higher BMIs compared to men and were much more symptomatic at baseline.
Females had more systemic inflammation and compared to previous HfpEF studies, females with obesity-related HfpEF were also younger.”
Unknown Therapeutic Mechanism?
An even more intriguing result was that the heart failure risk reduction was similar between the 2 sexes. Contrary to what was believed until now, this could indicate that semaglutide is protecting against this risk through a different mechanism than weight loss.
“Semaglutide, compared with placebo, similarly improved HF-related symptoms, physical limitations, exercise function, and reduced inflammation and natriuretic peptides regardless of sex.”
As at least the effect on heart failure seems not to be directly correlated to weight loss, it is now considered likely that semaglutide has another direct effect on the cardiovascular system.
Takeaway
The astonishing success of semaglutide in the obesity market was built on its previous reputation as a safe and efficient diabetes drug. It is now quickly becoming essential in the treatment of heart failure risk linked to obesity.
Semaglutide operates by interacting with the GLP-1 protein. This protein is at the top of a very complex and still in part poorly understood chemical signaling pathway inside human cells. It affects fat tissues and the cardiovascular system, but also the stomach, tongue, brain, bones, kidneys, liver, and lungs.
So, it is possible that even further discoveries are to be expected for semaglutide. Other molecules affecting GLP-1, like, for example, Novo Nordisk’s amycretin, act on both GLP-1 and and amylin, a pancreas hormone controlling hunger. You can learn more about this drug that might be coming to the market in a few years in our article “Will Amycretin Be the Next Big Thing for Novo Nordisk?”.
Semaglutide & GLP-1 Companies
1. Novo Nordisk A/S
Novo Nordisk was historically mostly known for its diabetes therapies, representing 79% of its current revenues. It is a company we already covered in “Top 5 Blue Chip Pharmaceutical Companies”.
Source: Novo Nordisk
A smaller part of its activity is obesity, with just 9% of sales. But an important part is the astonishing growth rate of 84% in 2022. This is entirely based on the launch of Wegovy, an injectable weight-loss medicine. Wegovy mimics a weight-related hormone called GLP-1 (glucagon-like peptide-1).
It had a stellar start, to the point where some manufacturing issues have led to a global drug shortage. The success of Wegovy has boosted Novo Nordisk’s sales growth expectation for 2024 from 13-19% to 24-30%, as the production is now high enough to satisfy demand.
In the US, they recruited US rapper Queen Latifah for a campaign about the stigma surrounding obesity treatments. The success is global, notably in China:
Young girls crowded into the endocrine and metabolism department of the hospital, regardless of whether they were thin or fat, just to get a dose of semaglutide.
In the doctor’s hospital, they only prescribed just over 100 doses of semaglutide in June, but now the number has risen to 1500-2000 doses, which is the average sales volume of semaglutide in most tertiary hospitals in Shanghai.
When Wegovy disappeared from inventory, the other Novo Nordisk treatment for type 2 diabetes, the drug Ozempic, using the same molecule, was often used as a substitute. Even Elon Musk referred to Wegovy as a way for him to lose unwanted weight.
The GLP-1-inspired drug has been a hit, even larger than Novo Nordisk expected. It might also be something that will need to be taken continuously to keep its benefits, making it a long-term treatment and cash cow for Novo Nordisk.
“Using tirzepatide might be a lifetime decision.”
Fierce Pharma – Dr. Dan Skovronsky, Eli Lilly’s chief scientific and medical officer,
It must nevertheless be emphasized that potential side effects are no joke, including thyroid cancer, pancreas inflammation, kidney problems, and gallstones. So it is highly recommended to get medical advice first and use it only for severe obesity, and NOT for small weight losses like the young Chinese girls mentioned above.
These issues are related to the whole metabolism, so competitors’ products will likely carry the same risks. This is something investors will want to keep in mind.
When it comes to diabetes, Novo Nordisk is working on weekly and monthly insulins, better insulin pumps/implants, and DNA immunotherapy.
Novo Nordisk’s R&D pipeline also includes other diseases, notably MASH (metabolic dysfunction-associated steatohepatitis) with 4 candidate drugs.
A long-time leader in diabetes, Novo Nordisk’s history has been shaped by the improvement in diabetes therapies and the spread of the disease. It is now becoming an equally important company in treating the quickly growing obesity epidemic.
As a permanent cure for type-2 diabetes seems out of reach for several years at the very least, it is likely that Novo Nordisk will keep benefiting strongly from obesity and diabetes, both brought on by an increasingly sedentary lifestyle and unhealthy diet.
2. Eli Lilly and Company
Right on the heels of Novo Nordisk, Eli Lilly has its own potential blockbuster obesity drug, Mounjaro. Its preliminary clinical trial had similar and maybe superior results to Wegovy, an average reduction of nearly 16% of test patients’ body weight. The weight loss can even be up to 22% for patients without diabetes.
Mounjaro is targeting not only GLP-1 (like Wegovy) but also GIP (glucose-dependent insulinotropic polypeptide). Lilly is another leader in the field of diabetes and insulin, so it is not surprising that they are almost as advanced in this field as Novo Nordisk.
Mounjaro was already a very successful type-2 diabetes drug. UBS analysts suspect that with approval for obesity treatment, Mounjaro could become the first drug to sell for more than $25B in just one year.
Mounjaro is now commercialized for obesity under the brand name Zepbound, after the FDA approval for this indication in November 2023.
Eli Lilly is a more diversified company than Novo Nordisk, with a pipeline notably focused on Alzheimer’s, Parkinson’s, cancer, immunology, etc.
Already Mounjaro + Zepbound sales are projected to triple in 2024 thanks to the entry into the obesity market.
GlobalData analysts added to the debate Wednesday, predicting that Mounjaro sales will hit $34 billion in 2029
The analysts expect Mounjaro to bring in as much in 2029 as Eli Lilly’s entire portfolio did in 2023—and are tipping its Alzheimer’s disease prospect donanemab to add a further $5 billion.
Fierce Pharma
For the foreseeable future, it is likely that the obesity market will be split between Novo Nordisk and Eli Lilly, with the ratio of this partition yet to be seen.
It is hard to predict who will win this market, as Wegovy has the first-mover advantage. But Mounjaro might be more efficient, only to be potentially threatened later on by amycretin, toward the end of the decade.
